The Killing Season Uncut (14 page)

The other major unresolved reform was the ETS. It's tempting to say that the story of the government's climate policy was the most disputed part of the narrative, but that sentence could preface a description of every major policy in 2010.

There are a few certainties. Rudd's decision to shelve the ETS was a disaster, and the way the news broke, via a story in
The Sydney Morning Herald
, robbed the government of the ability to present a coherent argument for the delay in implementing the scheme. And Rudd's statement in 2006 in a nondescript room in Parliament House, that climate change was a great moral challenge, had cut through, even with voters who didn't understand or particularly like the idea of an ETS: they knew a core commitment when they heard one and punished Rudd when he broke faith with it.

Over time Rudd blamed Gillard and Swan, claiming they forced him into making the decision. So what really happened? Friend and ALP strategist Bruce Hawker saw Rudd soon after he returned from Copenhagen.

I saw him at Kirribilli one day and he was more angry I think about the way in which China particularly had conducted itself. I think it took him a while to really come to grips with the hard reality that this was an issue that was causing us a lot of damage.

A document prepared for the post-election review committee suggested that in February 2010, Kevin Rudd's chief of staff, Alister Jordan, discreetly commissioned research to test the public's response to postponing the CPRS. Rudd denied any knowledge of it.

I have no recollection of any such conversation with Alister. The fact that it was done and that Alister may have been party to such a discussion, I just regard as entirely normal. I had reached no such decisions at all.

ALP national secretary Karl Bitar was arguing for the CPRS to be delayed. Craig Emerson recalled a meeting with Bitar in early 2010 where the Small Business Minister thought Bitar was looking for allies in his efforts to convince the Prime Minister to abandon the policy.

I found out that the CPRS was on the nose with the Secretariat when they came to see me. Karl Bitar said to me that the polling on the emissions trading scheme was diabolical, that people had turned very strongly against it. So the Secretariat had taken the view that this thing needed to be dumped.

Lachlan Harris said the reliance on polling to drive decisions on such a complex issue was absurd.

There was a huge, huge misinterpretation of what polling can tell you and what it can't. It can tell you what someone thinks of a policy. What it can't tell you is how someone will judge a leader who changes that policy.

At the same time, Gillard was also arguing the CPRS should be postponed.

JG: Yes, at that stage I thought the Carbon Pollution Reduction Scheme was something that we hadn't sufficiently campaigned for and we had boxed ourselves in.

SF: You thought it was the right thing to do to delay the ETS and you were arguing forcefully for that?

JG: Yes I was.

During a pause in our interview, as we discussed Rudd's use of the word ‘moral' in his original climate change statement, Gillard rolled her eyes. It was a brief moment of candour caught on camera. Kevin Rudd claimed to have seen the same attitude in Cabinet.

Julia, to my great surprise, in a meeting of the full Cabinet, began somewhat mockingly to refer to the commitment on climate change as the greatest moral challenge of our age, and I was surprised by that, because that was the mockery that we had externally from Tony Abbott.

Rudd's focus stayed on health. The media wasn't pressing hard for an answer on the future of the ETS policy and the decision-making stalled. For Combet, the Prime Minister's indecisiveness may have been fatal to his leadership.

No-one knew what the game plan was. We didn't. None of us knew whether we were going to bring it [the ETS] back into Parliament, try and renegotiate it, try with the Greens to get [it] through Parliament, go to a double dissolution election. What do you do? And Kevin's delay and obvious difficulty in grappling with such an important decision just led to this corrosion of confidence in his leadership over those months. You know, that's not to be underestimated. The carbon pricing has brought down a lot of political leaders and I'd count Kevin Rudd amongst them.

 

Every now and then we found a precious piece of archive. One afternoon, producer Justin Stevens tore off his headphones and told us to come and look at some footage of Rudd and his economic adviser Andrew Charlton sitting at a table in a courtyard at Parliament House. The date was 21 April, the day the decision to shelve the CPRS was taken.

Imagine telling a story about a policy as abstract as the CPRS where almost every important scene takes place behind closed doors. Here was a moment when the cameras were present at such a scene, albeit without realising it. We pleaded with Charlton to come back for a second interview to explain it, which he agreed to do.

On Wednesday 21 April, with Wayne Swan's third Budget only weeks away and the Treasurer looking to finalise the details, a meeting of a special Cabinet subcommittee was scheduled in Canberra. Combet recalled Swan's demeanour that afternoon.

So that meeting, it started in Canberra and decamped somewhere else … [it] was an endgame where finally a decision had to made. I remember Wayne Swan, while we were waiting for Kevin to come to that meeting, he was very agitated about the necessity to lock the Budget away … He [Kevin] was very, very late to the meeting, like hours I think from memory, and he was out in the courtyard with one of his staffers. And I don't begrudge him this, I'm not criticising him by making the observation. This was such a hard bloody call and he must have known how significant it was for him, and he was taking the advice of one of the guys in his office that he trusted very much.

There was no useable sound in the archive of this scene: the camera was too far away. Charlton described his conversation with Rudd.

We had a final look at all of the options to take the climate change policy forward … He selects one based on his belief that the key to unlocking this problem is getting other countries to move. And he believes that we can get other countries to sign up to another post Kyoto agreement, and that once we do that, that will change the politics in Australia, obliterate the Liberal Party's opposition and enable us to get the climate change legislation through the Parliament.

This came at the end of a charged week for the Prime Minister. After some bitter battles, Rudd had concluded the health reform agreement with the states and territories and at the same time had been involved in discussions on the controversial mining tax.

Andrew Charlton (AC): After four months of searching for the right answer on this question, this was D-day. We were
getting close to finalising the Budget and this was the Cabinet subcommittee meeting that was required to make a decision … The consequences of the Budget were significant. This was a big policy change, it flowed right through the Budget, and so leaving it to the last minute wasn't really an option.

SF: I suppose the Treasurer would say you were already pretty close to the last minute by then.

AC: And he'd be right.

Rudd, however, maintained the decision about the CPRS did not need to be taken then. There was still time before they had to close the Budget.

KR: I was quite angry that they were seeking to push me into a decision to suspend funding for the CPRS in the May Budget. I needed to look at the papers. I needed to get my head around it and look at both the policy and the politics, and the budgetary implications. And that was my way of proceeding. And there was time to do that.

SF: Not a lot of time?

KR: There was time to do that.

SF: There were only a couple of weeks before the Budget.

KR: There was time to do that.

Rudd described the meeting.

My view was that we should continue. That was not the view of Julia Gillard. Wayne Swan backed her position on that, ostensibly for budgetary reasons. Lindsay Tanner was concerned about the fiscal implications of continuing with the position,
but Lindsay also said that the policy itself should not be walked away from. Penny Wong was with me with it: we shouldn't back away from the policy.

Rudd's claim seemed to be at odds with his discussion with Charlton.

SF: Are you saying that you were not looking for a way yourself of delaying the CPRS?

KR: This was not on my mind as I entered those discussions.

Rudd agreed to take the figures associated with the CPRS out of the Budget. It was gone, at least until after the election.

Rudd became testy, insisting the ETS decision, so damaging to his reputation, was taken under duress.

I had my most senior colleagues within the SPBC fundamentally opposed to my continuation with this policy. It was a question of government unity at the most senior levels.

Gillard was even more emphatic in her response.

No, that's rubbish. I said clearly on more than one occasion, ‘If your judgement call, Kevin, is to go out and fight this thing, then let's go'.

Gillard had pushed hard to delay the policy, but on the issue of government unity, onscreen her answer is more credible.

Wayne Swan also disputed Rudd's interpretation of the events.

SF: Kevin Rudd said that you and Julia Gillard argued vehemently against the CPRS. His suggestion was he had been forced into that decision by the two of you. Does that accurately represent what happened?

WS: Well, that wasn't what I did. It was a decision that he couldn't come to grips with and he's seeking to blame other people for his own failure of leadership.

 

As with many events in
The Killing Season
, the depredations of memory also played their part in this particular story. In our interviews we heard conflicting versions about who was at the special Cabinet subcommittee meeting, exactly where the meeting was held, and whether or not a decision was finally made. Some versions had Penny Wong present; Rudd thought she joined in by phone. Combet was in the room in Canberra but couldn't recall a formal decision being made.

It was a bit of a blur. Doesn't that tell you how the government was operating? I mean that should have been a full Cabinet meeting with papers prepared in advance and a political and policy analysis, with strategy articulated behind it, the responsible minister leading the discussion with the Prime Minister so that the Prime Minister has the benefit of the advice of the Cabinet ministers. You know, when those processes break down, this is the sort of thing that happens.

Six days after the meeting,
The Sydney Morning Herald
published an article by journalist Lenore Taylor claiming the Rudd government had ‘shelved its emissions trading scheme for at least three years'. Taylor's piece, ‘ETS off the agenda until late next term', cited Budget savings, ongoing internal debate and opposition attacks as reasons for the decision:

as debate rages within the government over political strategy on climate change, the
Herald
has learnt it has decided to put the scheme on ice to undercut the “great big new tax” scare campaign, particularly after the failure of the Copenhagen
climate conference and uncertainty over the fate of the US emissions trading scheme …

It was a bad start to the day for Lachlan Harris.

It must have been five-fifteen in the morning, lying in bed, receiving the alert, reading the story and understanding straightaway that a series of events had begun that most likely would end very, very badly … I don't think it was clear at that point that that was going to lead to the unwinding of the first Rudd government, but there was absolute clarity. There was no doubt that this was a ginormous, huge political problem, bigger than anything we'd faced before.

Agriculture Minister Tony Burke was unaware his colleagues were considering changing the policy.

I had absolutely no idea the conversation was going on at all. I was a member of the climate change subcommittee of the Cabinet: the discussion wasn't happening there. I knew that Mark Arbib and Karl Bitar had a view that we should pull back. I had a different view. But I didn't advance it in private conversations 'cause I was waiting for the issue to come to Cabinet.

Jenny Macklin was on the Expenditure Review Committee, a group of ministers involved in determining the government's financial priorities and shaping the Budget. She was also unaware of the decision to delay the ETS.

[We] got word that Lenore Taylor had the story and of course we all then had to put aside what we were thinking about and consider what the Prime Minister was going to say. It was a shock, because a decision actually hadn't been finally made as far as I was concerned.

Andrew Charlton said the government wasn't ready for the decision to be made public.

The leak meant that the government was caught on the hop. The government didn't have a chance to explain the policy logic of the change that it had made and the narrative was defined as the government dumps the CPRS, which was a long way from what the Prime Minister had intended.

The morning the story broke, Kevin Rudd was on his way to the Nepean Hospital in western Sydney to spruik the recent health reform agreement. Media adviser Sean Kelly was with him.

Alister Jordan was in the car with us. Now Alister was very closely involved in a lot of things, but for him to be in the car writing the script for a press conference gives you a real sense of the gravity of that leak.

Kelly recalled Rudd's mood at the hospital before fronting the press conference.

The advancers always find you a room that you can brief the Prime Minister in before a press conference. Kevin is working on the script that Alister has prepared. And he is furious. I've seen Kevin angry quite a lot but I've never seen him as angry as he was that day. Absolutely icy-cold anger.

Julia Gillard was critical of Rudd's performance that day.

The press conference had made a bad situation worse in that climate change had been dealt with almost as a kind of afterthought, and the explanation given by Kevin had just not credibly come out. Now to be fair to Kevin, he's woken up to the newspapers too, but in a situation where he was on the back foot I think it went badly rather than a little bit better than badly, the two choices for the day.